By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Martin Kocher said Friday that uncertainty surrounding the inflation outlook remained high, with geopolitical developments capable of rapidly affecting energy prices.

“The Governing Council will in the autumn take those decisions, based on the incoming data, that can return inflation in the euro area sustainably to the 2% target,” Kocher, who heads the Austrian National Bank, said in a statement.

Kocher said Austria’s flash consumer price estimate showed a favorable development, with inflation falling markedly to 2.7% in July.

Lower food prices made a significant contribution, he said, adding that the reduction in value-added tax on basic foodstuffs had played a part.

At the same time, services inflation remained high and energy prices had risen again recently, Kocher said.

“The past few weeks in particular have shown how rapidly geopolitical developments can change energy prices and therefore also the inflation outlook,” he said. “Uncertainty and volatility remain high.”

The Austrian National Bank will publish its next comprehensive forecast for inflation and economic growth in Austria on September 11, he said.